Benzinga - Nasdaq Inc. plans to launch its digital asset custody services by the end of the second quarter, joining the ranks of conventional financial institutions that could potentially serve as intermediaries in the cryptocurrency space, in light of recent industry bankruptcies.
The international exchange group is progressing with the necessary technological infrastructure and regulatory approvals, according to Ira Auerbach, senior vice president and head of Nasdaq Digital Assets, in a recent discussion in Paris.
Nasdaq has submitted an application to the New York Department of Financial Services for a limited-purpose trust company charter, which would supervise the new venture, Bloomberg reported.
Initially disclosed in September, this initiative represents Nasdaq's inaugural significant venture into the world of cryptocurrencies.
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Auerbach indicated that providing secure storage for Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) is the first step in developing a comprehensive range of services for the digital assets division of the group.
This could eventually encompass execution for financial institutions.
The downturn in cryptocurrency values contributed to bankruptcies, culminating in the collapse of the FTX exchange in November.
As the preferred digital asset exchange for trading firms and professional investors disappeared, traditional financial companies such as Nasdaq have begun to enter the scene.
Joining the ranks of Bank of New York Mellon Corp (NYSE: BK) and Fidelity NASDAQ Composite Index Fund (MUTF: FNCMX), Nasdaq will be among the major financial institutions offering crypto custody services.
Meanwhile, other firms concentrate their efforts on tokenizing conventional assets such as bonds, anticipating that the underlying technology of cryptocurrencies will enhance the efficiency of trading and processing these assets.
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